Restaurant/Bar near Palestra and or Headhouse Sq.
I will be in Philadephia with my family (2 young girls) for a basketball game at the Palestra. We are staying at the Hyatt in Penns Landing. We are looking for places to eat with the kids that are not chain restaurants. Good food, and ambience. Not a sports bar.
At the hyatt you are very near to both the Old City section of Phila and South Street/Queen Village - those areas really don't have any chain restaurants (yeah!) I don't know how young the girls are or if you have any food preferences, but some places to consider would be Jones (american/comfort redone) at 7th and Chestnut (a little far but always family friendly), Los Bugambilia's (mexican) at 2nd and South. Slightly more adventurous would be Zot on Lombard between front and second, Great beer list and mussels to die for. With some extra food direction there are MANY more options in that area.
If you're going to be at The Palestra, make the short trip up Smith Walk between the engineering buildings, across 34th Street and up onto Locust Walk. Make a left and head into Houston Hall and experience Pari Cafe Creperie. Savory crepes (chicken, ham, etc.) and sweet crepes (strawberries ala mode with nutella) don the menu all under $6 each.
Near Headhouse Square I like Ava, a pretty basic but tasty Italian BYO. You have lots of options in Old City that would be fine with kids (assuming you are eating relatively early before it gets too crowded): Cuba Libre, Continental, or my favorite place Race Street Cafe. I've had great brunches lately at Farmacia but can't vouch for it as a dinner spot. Also, Campos is great for a cheesesteak, hoagie, or other italian sandwich.
If you haven't come to Philly already, there's a nice Chinese restaurant, Mustard Green's, on 2nd Street between South and Bainbridge, that is pleasant, family friendly, and quite good. You can get excellent thin crust pizza and nice salads/antipasto at La Fourno on South Street, at approximately 6th Street.